Are automated workflows the future of the finance department?

Road blocks in the way of automation

AP automation not only represents a complicated transformation process but also a costly one. This has not escaped the attention of the C-suite either, outlined in AIIM’s Finance and Accounting in 2017: Automating Core Information Workflows report, in partnership with Canon. In fact, 25% of finance professional believe that their adoption of an AP automation solution would have no perceived effect on their invoice processing costs. This despite, 23% predicting a 15%-20% cost reduction by deploying an AP automation solution, and 22% expecting invoice cost reductions of 25%-50%. Why then are the tangible benefits of automation getting overlooked?

Clearly something’s not adding up when it comes to finance automation. The picture becomes clearer however when we consider that those who have already invested in the automation process state positive feedback in line with what all finance departments are striving to achieve: 28% have reported reductions in cost of 25%-50% by adopting an automated AP solution. Twenty-four percent of automated organisations reported achieving payback from the solution in 3 months or less, while 36% achieved ROI within one year. These results, however, still seem unable to incentivise companies who are hesitant to adapt to the automation process.
But cost is just part of the challenge. Culture too seems to be getting in the way of finance’s reboot. While a third (29%) of organisations cite a lack of capital as having stopped their automation efforts, 27% are held back by concerns about managing change. Of course transition can be uncomfortable for some but if finance is committed to becoming a productive, proactive part of the business, embracing digital overhaul is essential.

C-Suite must lead the way to automation

Perhaps the hardest barrier to overcome however is that of legacy. Twenty-two percent of executives describe automation as a solution that is “neither customisable or in-line with their current priorities”; resulting in a reluctance to push automation projects through. A further 23% report that juggling a number of projects makes prioritising a struggle. This senior reluctance to truly back an automation push is apparent. A quarter (27%) of employees cite senior executive attention and sponsorship as a major roadblock to getting AP/AR automation project approval, despite the fact that advanced processes could massively improve their performance.

Ultimately, the C-suite must be convinced of the potential of automation before committing to a transformation plan. While some may already be convinced of the benefits, for example faster turnarounds (46%), greater accuracy (46%) and better data capture (35%); it is still a daunting step for businesses who lack digital experience. Finance teams should therefore focus on building a strong business case for transformation, focusing first on the processes that will have the biggest impact on the business, with minimal investment required. Once senior management are convinced of the benefits, a wider automation strategy can then be rolled out.

If finance is ever to be truly considered an innovative function that’s part of a businesses’ drive forward then it needs to work hard to move away from its bean counting reputation. The opportunity is there. Automation has the potential to transform finance perhaps more than any other department and in so doing, liberate the department from its dusty reputation.